Many members of the Hong Kong Institute of CPAs are also ACCA members because of our history of offering the HKSA/ACCA joint examination scheme (JES). JES members are the heart of the Hong Kong Institute of CPAs. For decades, they have contributed to the development of the accounting profession and to the progress of the Institute. I am grateful to them and proud to have them as members.

However, ACCA's management in London is following a combative business strategy worldwide. Here in our backyard, they are trying to undermine the Institute in the eyes of students, our members and the government.

Their strategy includes taking negotiations on a mutual recognition agreement into public arenas - the news media, and negative letters to our mutual members. The Council and I regret the public nature of what is now characterized as a dispute, rather than a negotiation process, with the ACCA.

 For many years, the ACCA examination was the de facto examination of the Hong Kong Society of Accountants (HKSA). It was the right examination for the time and had the full endorsement of the Society.

As part of a long-term strategy set out in the HKSA's "Third Long Range Plan" published in 1993 was the intention to create our own examinations to meet the demands of the 21st century. This strategy was endorsed by the membership and shared with the 14 recognised professional bodies after a long and extensive consultation in the mid-1990s. You may wish to refer to the series of Position Papers under the theme "Into the 21st Century" published by the HKSA in 1995, 1996 and 1997. The recently announced re-evaluation of overseas qualifications – including that of the ACCA – is simply part of the implementation of this strategy.

We have been talking about re-evaluating our existing recognition arrangements with the ACCA (and the 13 other bodies we currently recognise) since 1998, the year before we implemented our QP. Because of our long history with the ACCA, we were happy to extend our recognition of them for a further five years after termination of the JES. Our hope was that they would engage us in a dialogue in the intervening years to enable continuing recognition post-2005. They clearly choose not to. The MRA itself, signed in 2000, contemplates the possibility of a review in 2005 and provides for the agreement's termination on a 12 month notice.

The Hong Kong Institute of CPAs is charged with preparing our next generation of accountants to meet the highest international standards for skills and judgement. We intend to be the gold standard in Asian/Pacific to which everyone else aspires. We anticipated the opportunity for Hong Kong to become a regional centre of professional excellent and the time for this is now.

We shared our vision with all our recognition partners more than 10 years ago, and there has been ample time for consultation. In a meeting in February 2004, the Chief Executive of ACCA, Mr. Allen Blewitt, proposed to us that the Institute return to using the ACCA examinations as a joint scheme operated solely by ACCA in Hong Kong . Given that the Institute's QP is now the benchmark for qualifying as a Hong Kong CPA and forms the basis of the HKICPA 's reciprocal membership with seven overseas chartered accountancy bodies, the ACCA's proposition was determined incompatible with the Institute's direction.

We have come near to reaching our goal of total autonomy and control over our own education and training policy. This has taken 30 years - since we were founded. The learning outcome achieved by the QP and the standard it sets brings the CPA qualification to the level of a post-graduate business qualification. The objective for the evaluation process is to arrive at a common outcome of competency for all our MRA partners, including the ACCA.

We need the support of the membership to keep Hong Kong at the forefront of professional excellence. Please write to let us know you do at this email address: < enquiryonaccarecognition@hkicpa.org.hk >.

In conclusion, I want to let you know that negotiations with ACCA are continuing. However, we expect to see more news coverage this week and we hope to see stories more accurately portraying our role, rather than stories claiming the Institute is dealing unfairly with the ACCA, its members and students. These inaccurate stories also claim that I have disparaged ACCA qualifications. However, the ACCA's action of circulating these inaccuracies to their 16,000 members and 13,500 student members in Hong Kong is unacceptable, especially from an organisation of ACCA's stature. The inaccuracy was regrettable, but to organisations such as the ACCA that are accustomed to dealing with the media, I would have expected greater understanding and the professional courtesy of calling me for clarification before spreading and amplifying an inaccurate message.

We are meeting the President and Chief Executive of the ACCA tomorrow morning to find out what they wish to achieve.  We shall inform members the progress and outcome of the meeting. Depending on the demands from the ACCA, we shall consult the membership.

We appreciate your forbearance in this matter.